Remuneration Strategy and Policy for "Dove" House

Essay, 2014

45 Pages, Grade: 1,0

Anna Jung (Author)



1. Introduction
1.1. About Unilever
1.2 Opening a Dove House in London

2. Reward Strategy
2.1 Reward Goals
2.2.1 External Market Competitiveness
2.2.2 Promoting our Performance Culture
2.2.3 Promoting Teamwork and our Values
2.2.4 Promoting Learning and Development
2.2.5 Engagement and Satisfaction

3. Reward Strategy for the Dove House Employees
3.1 Rewarding Managerial Employees
3.2 Rewarding Shop Floor Employees
3.2.1 Massage Therapists and Cosmetologists
3.2.2 Customer Service Assistants and Cashiers
3.2.3 Rewarding Collaboration
3.3 Collective Rewards
3.4 Non-Financial Rewards
3. Reward Policy
3.1 Implementation
3.2 Ensuring Reward Effectiveness
3.2.1 Equity, Fairness and Transparency
3.2.2 Employee Involvement and Communication
3.2.3 Line Manager Training
3.2.4 Evaluating Reward Effectiveness

4. Conclusion


Appendix 1: Unilever’s Business Model

Appendix 2: Dove House Employees – Job Descriptions

Appendix 3: Reward Policy for Dove House Employees

Appendix 4: Remuneration Benchmarking (Central London-Area)

1. Introduction

1.1. About Unilever

Unilever is an Anglo–Dutch multinational consumer goods company and is the third-largest consumer products company in the world. Unilever is organised into four main divisions - foods, refreshment, home care, and personal care, which include well-known brands such as Dove, Knorr, Magnum and Ben & Jerry’s.

Unilever’s business strategy sets out the vision to double in size while reducing its environmental footprint and increasing its positive social impact. The diagram below (Figure 1) illustrates our virtuous circle of growth which outlines how we derive profit from our business model (see Appendix 1 for detailed information). Further, our values of integrity, responsibility, and respect help to fulfill our ambitions by guiding our employees in the judgements and decisions they make every day.

Figure 1: Unilever’s Virtuous Circle of Growth

Abbildung in dieser Leseprobe nicht enthalten

Source: Unilever, 2013:9.

1.2 Opening a Dove House in London

Given the increasing distribution challenges currently facing the consumer goods industry (Blissett et al., 2010), Unilever needs to find new ways to connect directly with consumers to achieve its growth strategy. Setting up a store in central London for Unilever’s largest Personal Care brand Dove, which is available in over 70 countries and has an annual turnover of over €3 billion (Unilever, 2012), presents an alternative sales channel to traditional retailers and hence a solution to this prevailing issue. At the same time, this new business division provides an opportunity to feature Dove’s extensive range of hair, skin and body care products. In this way consumers will be able to experience the different products, which often is connected with difficulties in retail stores, and to receive personalised product recommendations on the basis of skin assessments on the ground floor of the Dove House. Moreover, the first floor will offer visitors various professional beauty services and a luxurious spa on the top floor will provide visitors a place to feel good about themselves where they will be able to receive a full range of relaxing massage treatments.

This unique store concept will support Unilever’s achievement of its corporate mission ‘to help people to look good, feel good and get more out of life with brands and services that are good for them and good for others’ (Unilever, 2014). Furthermore, if the Dove House in London succeeds, further stores will be established in the UK and worldwide.

This new business division will involve the following groups of employees (See Appendix 2 for detailed job descriptions):

illustration not visible in this excerpt

2. Reward Strategy

In order to support the attainment of Unilever’s strategic goals, an effective reward management system for employees at all levels is highly important. Accordingly, a reward strategy is designed which reflects Unilever’s business strategy and is integrated with and supports other HR practices in the company (Ericksen & Dyer, 2005; Marchington & Wilkinson, 2012). The use of total reward forms part of our strategic approach, and aims to attract and retain the best staff. Particular emphasis is placed thereby on the intrinsic elements, alongside the extrinsic rewards, as they help to engender long-term employee motivation and secure employee discretionary effort (Armstrong, 2007).

2.1 Reward Goals

2.2.1 External Market Competitiveness

The reward strategy for Unilever’s new division seeks to attract, retain and motivate talented people who will drive our business forward. Particularly in the light of the high levels of staff turnover in London’s retail sector, especially among sales assistants and cashiers (NGRS, 2014; People 1st, 2013), it is essential to set the pay rates for our employees above the market level (Riddel, 2011). Furthermore, to compensate for the additional cost of living in London, allowances will be offered to our store management. Beyond that, contribution-related pay increases and various benefits, which will also be compared with the external market ensuring their competiveness, will support the attraction and retention of highly qualified managers.

2.2.2 Promoting our Performance Culture

To provide our customers with the best service and a unique Dove House experience, we will encourage our staff to grow to their full potential. Performance-related bonus schemes will recognise those who display behaviours that support the delivery of our business goals and deliver results. Various motivational theories, such as expectancy theory, goal-setting theory or attribution theory, underpin the strong motivational effect associated with this remuneration method (Shields, 2007; Wright, 2004).

2.2.3 Promoting Teamwork and our Values

Teamwork and cooperation are of vital importance to provide an excellent service to our customers. Thus we will offer collective incentives to encourage collaboration between the employees and thereby reinforce group cohesion and increase collective effort and effectiveness (Pfeffer, 1998). By doing this, we promote a team environment where people treat each according to our core values integrity and respect. Furthermore, rewarding employees for collective performance is likely to elicit organisational citizenship behaviour, i.e. extra effort, high initiative, extra customer service (Shields, 2007).

2.2.4 Promoting Learning and Development

Our reward systems are designed to encourage our employees to learn new skills and develop their competencies. This will not only enable to broaden our service portfolio and achieve high levels of customer satisfaction but will also lead to increased employee commitment (Lawler, 1995; Mitra et al., 2011). For this reason, taking a strategic approach, we place our focus on continuous learning and pay for the person rather than for the job.

2.2.5 Engagement and Satisfaction

We want to provide rewards that our employees will appreciate and value. This will keep them engaged, increase their retention and lead to higher productivity (Armstrong, 2007). Moreover, it will strengthen our employer brand and hence attract more talented candidates. We aim to achieve this by involving our employees in the reward management process and consulting with them on any changes in the reward practices.

3. Reward Strategy for the Dove House Employees

3.1 Rewarding Managerial Employees

To promote the success of the new division, the managers of the Dove House will be rewarded according to their individual contribution which will be assessed by their outcomes as well as their inputs (Armstrong, 2007). They will be given the opportunity to receive bonuses by delivering results such as sales increases, quality improvements, successful development of their subordinates and cost-reduction ideas. This will promote collaboration, which is required to achieve these goals, as well as enable Dove House to retain high-performing and remove poor performing managers (Perkins & White, 2011). Further, to reward managers for the way in which those results are achieved, their base pay will be related to the display of competencies (Brown & Armstrong, 1999) such as:

- Leadership
- Achievement orientation
- Communication ability
- Teamwork and cooperation
- Developing self and others
- Customer focus

This type of progression will encourage managers to develop their competencies, which in turn will be beneficial for their career capital as well as for Dove House’s continuing success. Further, in the case of Dove House ’s expansion, a broadbanded grading system will allow our managers to accomplish lateral career progression to other stores in the UK or even other countries without necessarily having to be promoted.

3.2 Rewarding Shop Floor Employees

3.2.1 Massage Therapists and Cosmetologists

Massage therapists and cosmetologists play a crucial role in providing our customers with a high quality experience so that they are happy to come back and will recommend a visit at the Dove House to their friends and family. Accordingly, since experience and qualifications in their work field have an important influence on the quality of the offered service, progression within the individual pay ranges will be dependent on the acquisition of new skills in terms of massage techniques and facial treatments respectively. This will enable us to expand and improve our service portfolio, and thus attract more customers.

3.2.2 Customer Service Assistants and Cashiers

Customer service assistants and cashiers will be paid on a single hourly grade rate that will be set, in line with the remuneration of other Dove House employees, above the market level to achieve their retention . Additional pay related to their team-performance, which will be outlined below in more detail, aims to ensure that they maintain a positive attitude towards our customers and treat them always in a friendly manner.

3.2.3 Rewarding Collaboration

In addition to their base pay, our shop floor staff will receive team-based rewards which will be dependent on the demonstration of customer-focused behaviours. This will encourage achieving higher standards in terms of work quality, effective teamworking and higher levels of customer satisfaction (Marchington & Wilkinson, 2011).

3.3 Collective Rewards

To raise employee interest and understanding of our business (Armstrong, 2007) and to increase organisational commitment (Coyle-Shapiro et al., 2002), all employees will be provided with a proportion of the business division profits. Further, they will be offered participation in a saving-related scheme by buying shares in Unilever. Similar to the profit-sharing option, the employee ownership scheme aims to increase motivation and to enhance loyalty (Perkins & White, 2011).

3.4 Non-Financial Rewards

In addition to financial rewards Dove House will provide a wide range of non-financial rewards, which will motivate our employees extrinsically as well as intrinsically. Extrinsic motivators encompass regular feedback, recognition and praise for delivering results and displaying behaviours supporting our values (Armstrong, 2007). For example, a ‘Hero of the Month’ who has excelled in the performance of their duties will be nominated among the shop floor staff. Intrinsic motivators, on the other hand, are provided, amongst others, through our collaborative but also challenging work environment. Further, our employees will receive intrinsic rewards from doing meaningful work by supporting Dove’s mission to raise women’s self-esteem (Dove, 2014) and creating a better future everyday (Unilever, 2013). Other non-financial rewards include:

- Development and training opportunities
- Work-life balance (flexible hours, shift working)
- Our values and culture


Excerpt out of 45 pages


Remuneration Strategy and Policy for "Dove" House
University of Hertfordshire
Remuneration Strategy and Theory
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remuneration, strategy, policy, dove, house
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Anna Jung (Author), 2014, Remuneration Strategy and Policy for "Dove" House, Munich, GRIN Verlag,


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